Launch of Discovery Bank. The world’s first behavioural bank

Today is an exciting day in our journey: the launch of Discovery Bank.

Today is significant because Discovery Bank is the latest manifestation of our core purpose and Shared-Value Insurance model, in what is essentially a new category of banking and a first of its kind globally – a behavioural bank.

In the same way our Shared-Value Insurance model aimed to address the shortcomings of human behaviour and the suboptimal design of insurance systems in life and short-term insurance, our latest adjacency is no different. Our Shared-Value model is highly relevant in the context of banking, and more importantly, in the South African context; given that more South Africans are credit active than employed; 40% struggle to make debt repayments; we have one of the lowest savings rates in the world; and less than 4% of our citizens are adequately prepared for retirement. In addition, consumers today require personalised banking that is transparent, equitable, and controllable. The case for disruption, and the opportunity for Discovery Bank, is therefore clear.

Our Shared-Value Insurance model is today being leveraged to build the first behavioural bank in the world. Vitality Money is the core mechanism underpinning the Bank’s behavioural differentiation, drawing from our expertise in behavioural science and incentive design over the past decade. The product design aims to address financial risk by collating and categorising financial behaviour according to the 5-3-80 model of financial health – five controllable behaviours of spending more than we earn, not saving regularly, not having insurance in place for serious events, not paying off property and not investing for the long term; result in three key risks of unaffordable debt, exposure to unexpected expenses or loss of income, and insufficient income in retirement; all of which result in 80% of events where individuals are unable to meet their financial obligations. Vitality Money will guide and incentivise consumers to achieve better financial health and resilience. 

In what is an industry first, Discovery Bank is able to offer Dynamic Interest rates to clients – linking interest rates directly to their financial behaviour; enabling clients to earn more interest on savings and pay less interest on credit as they improve their financial behaviour with Vitality Money. Discovery Bank further leverages the Vitality partner chassis to create an attractive ecosystem of rewards for clients in the form of Dynamic Discounts that further deepen Vitality’s incentives.

Our unique rewards structure is paired with the latest in banking technology; offering smart banking products with both transactional and credit card capabilities, a single credit facility, multiple ways to pay instantly, banking options for families and multiple savings options with dynamic interest rates – all accessible in real time on the Discovery Bank app.

While you will all agree with me that our new Bank business is exciting, today is important beyond simply the launch of a new business. The Bank symbolises our deep belief in the country and its future, and our role as Discovery to align our investment with our values. I remain committed to this objective and am proud of the tangible way the Bank articulates this.

Product innovations and updates were also announced today by Discovery Life, Discovery Invest and Discovery Insure; and I would like to thank all the businesses for their hard work over the past few months. I would especially like to thank the Bank team under the leadership of Barry Hore. Building a bank from the ground up is a near impossible task – with enormous complexity from a regulatory and systems perspective, amongst others. Together with incredible contributions made by Vitality, the R&D Lab and Marketing, the bank team has expanded the iconic Vitality chassis - bringing behavioural banking to life.

Beta testing will soon commence. I look forward to you experiencing the offering and welcome your feedback. I am also excited for our clients to engage with our core purpose in better health, and now wealth, as of March 2019.